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Online retailer Everlane has a straightforward mission: to
provide low-cost, luxury-quality, anti-brand clothing and
accessories for men and women, all without middleman markups.

It wasn't so simple when the site launched three years ago. "I
had no idea what I was doing," admits founder and CEO Michael
Preysman, 29, who had left a job in private equity in New York.

At the time, companies from Groupon to Google were feeding the
frenzy for daily deals. Gilt's flash sales revolutionized online
outlet shopping. And while Amazon had been taking down
traditional retailers, there wasn't a company disrupting luxury
clothing brands. Preysman, who is now based in San Francisco,
wondered how to bring upscale shopping--the streets of
SoHo--online. He started Everlane with the basic premise that
consumers have the right to know the story behind every product.

Everlane designs all items-- cotton T-shirts, wool scarves and
leather bags favored by a celebrity clientele--itself. The
website features slick flow charts and compelling stories about
the manufacturing processes, as well as thorough documentation,
in text and photography, of the factories involved, which are
located in the U.S., Europe and China. Such transparency is
relevant because Everlane uses many of the same facilities as
recognizable luxury brands.

"We try to focus on country expertise," Preysman explains. For
example, Everlane contracts T-shirt manufacturers in the U.S.,
while leather is sourced from Europe, and woven goods, including
cashmere, from Asia. After a Bangladesh factory collapse last
year killed 1,133 garment workers, Everlane matched $10,000 worth
of donations to the Rana Plaza Donors Trust Fund, which disperses
money to the victims' families.

Recognizing that retail markup can be a staggering eight times
production cost, Everlane keeps prices low in several ways. Aside
from the occasional pop-up, there are no brick-and-mortar stores.
The company shuns retail
partnerships, another way to reduce markup. Additionally,
Everlane relies on word-of-mouth over traditional advertising or
marketing (ad spending is less than 5 percent of total company
spending) to reach its avid fan base. And nothing ever goes on
sale.

"Most brands keep prices artificially high," Preysman says, a
strategy that allows retailers to offset sale prices with a
standard markup. "[Our products] never go on sale because we
manage inventory really tightly. When someone comes in, they get
the true value any time."

Revenue for 2013 was $12 million, according to Preysman, who
expects that number to triple this year. The company's tightknit
team of 40 is spread across three offices in New York, San
Francisco and Los Angeles.

Preysman believes Everlane is a test case for building a
profitable company on core values of transparency, community and
education.

"Modern consumers? All they want is information," he says. "We
really believe that education and information is the way to build
our brand--all the way down to labor on a specific
product."